Ferguson v. Soden

Thomas, J.

Action to redeem from sale under a deed of trust. Judgment in the court below for defendants, and plaintiff appeals.

The facts, for a proper understanding of the questions decided, will sufficiently appear in the opinion.

I. The trial court was correct in ruling that a feme covert in Missouri may, by joining with-her husband as prescribed by our statute of conveyances, execute a valid mortgage or deed of trust upon her legal real estate to secure a debt of her husband, and may appoint therein a trustee to make sale of the property in default of payment of the debt secured. Schneider v. Staihr, 20 Mo. 269; Hagerman v. Sutton, 91 Mo. 519; Rines v. Mansfield, 96 Mo. 394; Wilcox v. Todd, 64 Mo. 390.

II. It is contended that the debt secured by the deed of trust in question bore interest at a usurious *213rate, and the sale for that reason was void. The principal sum secured was $6,000, and payable five years after date. The interest thereon for the five years at the rate of ten per cent, was -secured by ten notes for $300 each, payable six, twelve, eighteen, twenty-four, thirty, thirty-six, forty-two, forty-eight, fifty-four and sixty months after date with interest at the rate of ten per cent, per annum after maturity, and the contention is that this transaction is usurious.

Conceding the correctness of this proposition without deciding the question, the plaintiff has no right to redeem from the sale under the deed of trust in question. The interest notes falling due six, twelve, eighteen, twenty-four and thirty months after date were paid, and the sale was made for default of payment of those falling due thirty-six- and forty-two months after date, and when the trustee credited the net proceeds of the sale on the note he allowed $23.08 interest on the notes falling due thirty-six months after date, and $8.08 on the note falling due forty-two months after date. There can be no question that the $23.08 was legally allowable as compound interest, it having been calculated from the expiration of the year. This leaves $8.08 only .which could be regarded as usurious interest under any rule that could be adopted. The land brought $2,500 at the sale, and there is a large balance of the debt that has not been paid. The plaintiff has a right to have this sum of $8.08 credited properly on the debt, if it was usurious, but she has no right to come into a court of equity and ask to have the sale set aside. If she had desired to take advantage of the defense of usury she should have tendered the proper amount before sale. Perrine v. Poulson, 53 Mo. 309; McGlothlin, Adm’r, v. Hemery, 44 Mo. 350; Corby v. Bean, 44 Mo. 379.

*214A contract calling for usurious interest is not void in Missouri. Montany v. Rock, 10 Mo. 506. In such case the creditor forfeits the whole interest, but the interest at the legal rate*is collectible from the debtor, and goes into the school fund. Revised Statutes, 1889, sec. 5976. One who voluntarily pays unlawful interest upon a usurious contract cannot recover it by suit. Kirkpatrick v. Smith, 55 Mo. 589; Ransom v. Rays, 39 Mo. 445.

It is no ground for enjoining a sale under a deed of trust that the notes secured reserve usurious interest or include it, except in those states where usury renders the contract void. The trustee’s duty to sell and apply the proceeds in discharge of the debt legally due remains the same. If he should attempt to misapply the proceeds and pay on account of usury what was not legally due, the court would interfere. Where usury does not invalidate the mortgage a sale under the power will not be enjoined by reason of it, unless the debtor brings into court the principal and the legal interest due. Tooke v. Neioman, 75 Ill. 215; Powell v. Hopkins, 38 Md. 1; Walker v. Cockey, 38 Md. 75; Eslava v. Crampton, 61 Ala. 507.

“After a foreclosure, a mortgage contract is regarded as executed. So long as the contract remains executory, the mortgagor can avail himself of the usury; but when it is executed, and others have in good faith acquired interests in the property, the objection can no longer be raised.” 1 Jones on Mortgages [4 Ed.] sec. 646.

III. The Connecticut Mutual Life Insurance Company at Hartford, Connecticut, though a foreign corporation, was authorized to make'this loan. Ins. Co. v. Albert, 39 Mo. 181; Long v. Long, 79 Mo. 652.

IY. Plaintiff’s laches is fatal to her claim of relief in this case. She and her husband executed the deed *215of trust in 1872. The property was sold under it by the trustee in 1876 to the Connecticut Mutual Life Insurance Company, and the possession of the property was then surrendered to it. Plaintiff’s husband died in 1879, and the insurance company sold the property to Patrick Soden, in 1880, for $12,000, and the latter took immediate possession and has continued in possession ever since; and this suit was not instituted until 1887. The property having gone into the hands of an innocent purchaser, and plaintiff having delayed action for over eight years after she became discovert, and no defect in the proceeding being apparent on the face of the deed of trust, or the trustee’s deed, it was too late for plaintiff to seek redress at the time she did. Burgess v. Railroad, 99 Mo. 508; Schradski v. Albright, 93 Mo. 48; Stamper v. Roberts, 90 Mo. 688; Kline v. Vogel, 90 Mo. 248; Reel v. Ewing, 71 Mo. 29.

What is said above in regard to usury is based on the law as it existed in this state prior to 1891. In the latter year, two statutes were passed making some radical changes on this subject, which it is not necessary for us to consider at this time as they do not affect the transactions involved in this controversy.

Other questions are presented by the briefs of counsel, but we do not deem them of sufficient importance to give them special notice. The learned trial judge in the court below gave this case a very careful consideration, as is evident from an elaborate, exhaustive and able opinion, which he prepared and filed, and which was printed for our reference, and the conclusions he reached were not only sound, but they were the only conclusions he could have justly reached under the law applicable to the facts disclosed by this record, and the judgment is, accordingly, affirmed.

All concur.